Paulson on TARP Paybacks: ‘Beginning of the Unwinding’

The following statement was released Tuesday by former Treasury Secretary Paulson.

Today’s announcement confirms that the TARP programs, in conjunction with the FDIC guarantee and the Fed’s liquidity programs, worked to stabilize our financial system. The recovery of our financial system is underway, but the road ahead is not short. Taxpayer investment in financial institutions is anathema to me – only the dire circumstances last fall forced us to take such an unprecedented step. I appreciate the participation of all the institutions that, by accepting TARP capital, helped to stabilize the financial system and prevent a much worse economic collapse.

Repayment of TARP capital investments is only the beginning of unwinding the broad array of temporary programs in place to support the financial system. The recovery of our capital markets must remain a top priority, as some sectors are still not performing as normal. I look forward to the day when our system and our economy are sufficiently strong that we can end the FDIC debt guarantee, close the Fed’s liquidity programs, and resolve the permanent status of Fannie Mae and Freddie Mac. When the temporary support programs are ended and the federal regulatory architecture is modernized we will have met our responsibilities to the American people of restoring a sustainable financial system through which capital can flow seamlessly to support a vibrant and prosperous US economy.

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